The company’s plan involves deploying next-generation software for capturing post-harvest pricing and advancing warehouse technology with the newly secured funds.
African commodities platform, AFEX, has received a substantial investment of $26.5 million from British International Investment (BII) to address food insecurity in countries of Africa such as Nigeria, Kenya, and Uganda. AFEX operates as a commodities exchange platform, facilitating efficient commodity trade in Africa and currently serves over 450,000 farmers.
The company’s plan involves deploying next-generation software for capturing post-harvest pricing and advancing warehouse technology with the newly secured funds. By employing smart storage solutions to extend the shelf life of harvested crops, AFEX aims to significantly increase the availability of food.
Food insecurity remains a pressing issue affecting millions across Africa. The 2022 Global Report on Food Crises 2022 Mid-Year Update revealed that at least one in five Africans experience hunger, with 140 million Africans facing acute food insecurity.
In 2022, Nigeria reported 17 million people as critically food insecure. By January 2023, it was projected that between June and August, 25 million Nigerians would face hunger. Meanwhile, in Uganda, as of January 9, 2023, 16.4 million people did not have access to sufficient food, marking an increase of 1.2 million food-insecure individuals from the last quarter of 2022. In Kenya, data indicates that between March and June 2023, over 5.4 million people experienced acute food insecurity, with numbers expected to rise.
Despite Africa’s immense agricultural potential, the continent grapples with unpredictable weather patterns, floods, and droughts that disrupt food production. To counter this challenge, AFEX’s initiatives come into play.
Currently operating over 200 warehouses in Nigeria, Kenya, and Uganda, AFEX provides services to a wide network of farmers. Since its inception in 2014, the company has been led by Ayodeji Balogun and trades in commodities like maize, cocoa, soybeans, paddy rice, sorghum, and ginger. In January 2023, AFEX expanded into Uganda, following its entry into the Kenyan market in 2022.
The newly acquired funds will be allocated towards the construction of 20 modern warehouses strategically located in Nigeria, Kenya, and Uganda. Additionally, the investment will be used to enhance warehouse technology and implement state-of-the-art software for documenting post-harvest pricing. These innovations are expected to prolong the shelf life of harvested crops, increasing the availability of food.
AFEX anticipates that the additional storage capacity of 230,000 metric tons (MT) will enable up to 200,000 more farmers to optimize crop harvest sales and access affordable storage, potentially resulting in a 200% increase in farmer incomes. Furthermore, AFEX will establish a soybean processing plant in Ibadan, Nigeria, and a drying facility in Uganda, creating over 700 temporary and 80 permanent jobs.